Hudson’s Bay Company Announces $1.25 Billion CMBS Financing
On November 24, Willkie client Hudson’s Bay Company announced that it has leveraged the value of its largest real estate asset, announcing a $1.25-billion CMBS financing deal secured by its flagship Saks Fifth Avenue store property in New York City. The 20-year mortgage loan is based on an independent appraiser’s assessment of the property’s value at $3.7 billion, significantly more than what HBC paid for all of Saks & Co. portfolio of stores when it acquired the company last year.
The transaction with Bank of America, N.A., Morgan Stanley Bank, N.A., Goldman Sachs Mortgage Co. and Bank of Nova Scotia is expected to close in early December. Proceeds from the transaction will be used to pay down corporate-level debt and to fund an approximately $250 million renovation of the Saks flagship, beginning in 2015.
Hudson’s Bay Company, founded in 1670, is North America’s longest continually operated company. Its luxury retailer subsidiary Saks & Co. currently operates 41 Saks Fifth Avenue stores and 67 Saks Fifth Avenue OFF 5TH stores throughout the United States and its online store, saks.com. Saks Fifth Avenue OFF 5TH is a world-class, full-service destination for value-priced clothes and accessories for men, women, children and the home.
The transaction is being handled by partners Thomas Henry and Henry Cohn, and associates Michael Jackowitz, Timothy DeKeyser and Natalie Whitaker.
RenaissanceRe Holdings Ltd. To Acquire Platinum Underwriters for $1.9 Billion
On November 24, long-time Willkie client RenaissanceRe Holdings Ltd. announced it has entered into a definitive merger agreement with Platinum Underwriters Holdings, Ltd. under which RenaissanceRe will acquire Platinum. Under the terms of the deal, the common shareholders of Platinum will receive $76.00 per common share in stock and cash, or approximately $1.9 billion. The transaction is being undertaken to expand RenaissanceRe’s market presence, product offerings and client relationships, and is expected to close in the first half of 2015. RenaissanceRe Holdings Ltd. is one of the world’s largest reinsurers of natural and man-made catastrophes.
Serving as lead counsel to RenaissanceRe Holdings Ltd. in the acquisition, the Willkie deal team was led by partners Robert Stebbins and Rajab Abbassi, and included associates Eleanor Tai, Evan Goodman and James Rosenthal. The firm’s industry-leading insurance practice has served as RenaissanceRe’s regular outside counsel since the company’s formation in 1993.
NY Appellate Court Dismisses Action Against Kenneth Cole
On November 20, a New York appellate court affirmed the dismissal of the plaintiff's action against Willkie client Kenneth Cole, in which minority shareholders challenged the fashion designer’s going-private transaction involving Kenneth Cole Productions, Inc. This is the first appellate decision under New York law to apply the business judgment rule to a going-private transaction where the transaction has the dual protections of a "majority of the minority" voting provision and the transaction is approved by a committee of independent directors.
The lower court had dismissed the complaint and applied the business judgment rule rather than the more onerous "entire fairness" standard. For a description of that decision click here. In upholding the dismissal and distinguishing prior precedent from the New York courts, the appellate court held that "contrary to plaintiff’s claim, the motion court was not required to apply the 'entire fairness' standard to the transaction by which Mr. Cole…. took the company private.” The Appellate Division held that the "merger in the case at bar required the approval of a majority of the minority (i.e., non Cole) shareholders." The court held further that "pre-discovery dismissal based on the business judgment rule was appropriate since there are no allegations sufficient to demonstrate that the members of the board or the special committee did not act in good faith or were otherwise interested."
The matter was handled by Tariq Mundiya, Sameer Advani and Benjamin McCallen.